This article highlights significant legal developments relevant to international arbitration law that took place in 2022.
The U.S. Supreme Court decided five arbitration-related cases in 2022, three of which potentially implicate issues in international arbitration.
In Badgerow v. Walters, the Court held that actions to confirm or vacate an arbitral award under Sections 9 and 10 of the Federal Arbitration Act (FAA) require an independent basis for federal subject matter jurisdiction. Circuit courts have been split over whether the “look-through” approach – which allows a district court to consider the underlying petition to compel arbitration under Section 4 of the FAA to determine whether there is a basis for subject matter jurisdiction – could be applied to actions to confirm, vacate, or modify an arbitral award under other FAA sections. In Badgerow, the petitioner had moved to remand an action to vacate or confirm an arbitral award to state court, arguing the federal court lacked jurisdiction because there was no diversity. The U.S. Court of Appeals for the Fifth Circuit, applying the “look-through” approach, found jurisdiction in the federal law claims of the underlying action. Distinguishing the text of Section 4 with Sections 9 and 10 of the FAA, the Supreme Court reversed, holding that the “look-through” approach did not apply to Sections 9 and 10.
In Morgan v. Sundance, Inc., the Court unanimously held that courts can conclude that a party waived its right to stay litigation or compel arbitration under Sections 3 and 4 of the FAA, respectively, without a finding of prejudice from delay. The decision abrogates well-settled precedent in the U.S. Courts of Appeal for the Second, Third, Fourth, Eighth, and Ninth Circuits. Relying on the text of Section 6 of the FAA, which requires that applications be “heard in the manner provided by law for the making and hearing of motions,” the Court explained that district courts must “apply the usual federal procedural rules.” Therefore, because a federal court does not require prejudice as an element of waiver “[o]utside the arbitration context,” the Eighth Circuit “was wrong to condition a waiver of the right to arbitrate on a showing of prejudice.”
In 2022, the Second and D.C. Circuits weighed in on the grounds for resisting enforcement of arbitral awards under the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). In Esso Exploration & Production Nigeria Ltd. v. Nigerian National Petroleum Corp., the Second Circuit affirmed in part and vacated in part a district court’s ruling denying enforcement of an arbitral award that was annulled in part by a Nigerian court. Looking to Article V(1)(e) of the New York Convention, which allows courts to decline to enforce an award that has been set aside by a court in the jurisdiction where the award was issued, the Second Circuit found that the district court had correctly refused to enforce an award issued by an arbitral tribunal seated in Nigeria that was later annulled in a Nigerian court because tax matters cannot be arbitrated under Nigeria law, but it had erred in refusing to enforce portions of the award unrelated to tax issues. The Second Circuit instructed that courts should enforce an annulled award “only if the judgment setting aside the award can be properly characterized as ‘repugnant to fundamental notions of what is decent and just’ in the United States,” thereby reaffirming the Second Circuit’s commitment to deferring to set-aside proceedings in the court of primary jurisdiction and placing substantial weight on considerations of comity and determinations of foreign courts. The Second Circuit found that the partial set-aside proceedings in Nigeria were not “repugnant” to U.S. policy and therefore the set-aside portion should not be enforced in the United States. But the Second Circuit remanded to the district court for additional fact-finding to define the portion of the award that had not been set aside in Nigeria so that it could be enforced.
In Pao Tatneft v. Ukraine, the D.C. Circuit considered whether the common law doctrine of forum non conveniens could be a defense against the enforcement of an international arbitration award in the United States, even though it is not one of the enumerated grounds for resisting enforcement in the New York Convention. Rejecting Ukraine’s arguments that the enforcement action should be litigated in Ukraine, the D.C. Circuit “squarely held” that forum non conveniens could not bar a party from seeking enforcement of an arbitral award in the United States because “only U.S. courts can attach foreign commercial assets found within the United States.” Arguing a split with the Second Circuit, Ukraine sought review by the U.S. Supreme Court, but the Supreme Court denied Ukraine’s petition for certiorari.
This year a number of cases dealt with issues of service in the context of award enforcement and the Foreign Sovereign Immunities Act (FSIA).
In Saint-Gobain Performance Plastics Europe v. Bolivarian Republic of Venezuela, the D.C. Circuit adopted a strict, textualist reading of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the Hague Convention) in holding that Saint-Gobain had failed to properly serve the Republic of Venezuela in connection with its efforts to enforce a USD $42 million ICSID award. Pursuant to Section 1608(2) of the FSIA, which provides for service “by delivery of a copy of the summons and complaint in accordance with an applicable international convention on service of judicial documents,” Saint-Gobain attempted service pursuant to the Hague Convention, which requires that once the Central Authority receives a request for service, it effects service consistent with the state’s internal law and then provides a certificate attesting that service was completed. Saint-Gobain delivered the documents to the Venezuelan Foreign Ministry, but the Foreign Ministry did not deliver those documents to the Attorney General (as required under Venezuelan law) or return a certificate of service to Saint-Gobain. Breaking with other courts which have found that service is proper notwithstanding the failure of the Central Authority to adhere to its requirements, the D.C. Circuit reversed and remanded, explaining that “[e]ven when ‘the equities of a particular case may seem to point in the opposite direction,’ the Supreme Court has required courts to adhere to the plain text of the FSIA and the Hague Convention in view of the ‘sensitive diplomatic implications.’” Saint-Gobain filed a petition for certiorari to the Supreme Court, but it was denied.
In Commodities & Minerals Enterprise Ltd. v. CVG Ferrominera Orinoco, C.A., the Second Circuit held that service of a summons is not required to confirm an arbitral award under the New York Convention, resolving an open question on the intersection between the FAA, the New York Convention, and the FSIA. There, CVG Ferrominera Orinoco argued that because it was an instrumentality of a foreign state, proper service required the delivery of a summons pursuant to the FSIA, even though the FAA requires only service of “the notice of the application” to confirm the award. The Second Circuit disagreed, explaining that “[a]lthough the FAA partially incorporates the FSIA . . . to fill gaps in how service must be made on a foreign instrumentality, those cross-references do not alter what must be served under the FAA.” According to the Second Circuit, “it would make no sense to import the FSIA’s requirement of service of a ‘summons and complaint’ into the FAA because motions to confirm arbitral awards are not commenced by the filing of a complaint.”
Providing clarity on district courts’ ability to enforce arbitral subpoenas, the Ninth Circuit in Day v. Orrick, Herrington & Sutcliffe, LLP held that a California court had subject matter jurisdiction under the FAA to enforce a third-party subpoena issued by an arbitrator against Orrick, Herrington & Sutcliffe, LLP (Orrick) in California, in connection with an arbitration seated in Washington, D.C.
Section 7 of the FAA provides that the district court “for the district in which such arbitrators, or a majority of them, are sitting may compel” compliance with an arbitral subpoena. The Northern District of California ruled that it had no subject matter jurisdiction to enforce the subpoena against Orrick, construing Section 7 to provide jurisdiction only in the district where the arbitration is seated. As a matter of first impression, the Ninth Circuit reversed and remanded, finding subject matter jurisdiction under Section 203 of the FAA, which provides federal district courts with original jurisdiction over “action[s] or proceeding[s] falling under the Convention.” The Ninth Circuit reasoned that venue in the Northern District of California—Orrick’s principal place of business—was proper under the general venue statute applicable to district courts, 28 U.S.C. § 1391, which establishes a proper venue is “a judicial district in which any defendant resides.” A potential obstacle to that conclusion was Section 204 of the FAA, which provides that an action or proceeding may be brought in the district “embrac[ing]” the place of arbitration if the arbitration agreement designates a place of arbitration in the United States. But the Ninth Circuit explained that Section 204 is a non-exclusive, “permissive” venue provision that “supplements, rather than supplants” the general venue statute.
In a long-awaited decision, on June 13, 2022, the Supreme Court unanimously ruled in ZF Auto. US, Inc. v. Luxshare, Ltd. that 28 U.S.C. § 1782 does not permit U.S. district courts to order discovery for use in proceedings before private international arbitral tribunals or ad hoc investor-State arbitral tribunals under the United Nations Commission on International Trade Law (UNCITRAL) Rules.
Section 1782 allows federal district courts to order discovery for use in a proceeding before a “foreign or international tribunal.” The Supreme Court’s decision clarified that neither private international commercial tribunals nor ad hoc UNCITRAL investor-State tribunals qualify as “foreign or international tribunals,” resolving a 3-2 Circuit split on that issue.
The Court found that private international commercial tribunals do not qualify as a “foreign or international tribunal” under Section 1782 because “[n]o government is involved in creating [the arbitral] panel or prescribing its procedures.” The Court’s ruling also is clear that Section 1782 discovery is not available for use in ad hoc UNCITRAL investor-State arbitrations. The Court suggested, however, that an arbitral tribunal could qualify as a “foreign or international tribunal” if the States intended to “imbue” the panel with governmental authority, as determined by “indicia of a governmental nature,” such as state funding, public disclosure, and a formal relationship with the State.
In the wake of the decision, questions lingered about whether Section 1782 discovery remained available for arbitrations administered by State-sanctioned institutions like the International Centre for Settlement of Investment Disputes (ICSID). One district court magistrate judge has now rejected a petition in aid of ICSID arbitration. The decision is being challenged before the presiding district court judge.
The Third Collegiate Court of the First Circuit ruled that the annulment of an arbitral award is improper where a party claims that the arbitrator did not apply foreign law (here, the Constitution of the State of California) but does not provide proof of the existence of the foreign law and its applicability to the case in question.
Under the Mexican Commercial Code, foreign legal regimes are subject to proof. Because the arbitration proceeding was conducted in Mexico, the party claiming that the arbitrator did not apply California law—not the arbitrator—had the burden to prove its existence and applicability to the case.
Canadian courts continued their trend of actively facilitating arbitration. In Cash Cloud v. BitAccess, the Ontario Superior Court of Justice confirmed that it had jurisdiction to grant urgent interim relief in aid of an international arbitration, granting a prohibitive injunction to maintain the status quo between the parties pending the completion of the arbitration.
Similarly, in Eurobank Ergasias v. Bombardier Inc., the Quebec Court of Appeal refused to issue a payment order to a losing party at arbitration that would render an international arbitration award effectively meaningless. The Court found that judicial policy and public order required courts to maintain the integrity of the arbitration process whenever possible to do so.
In Enrroxs Energy and Mining Group v. Saddad, the Supreme Court of British Columbia affirmed that an international award will be enforced unless the party resisting enforcement could exceptionally establish the limited circumstances set out in the UNCITRAL Model Law or the New York Convention.
The United States-Mexico-Canada Agreement (USMCA) entered into force on July 1, 2020. To date, six “legacy” disputes under USMCA’s three-year extension of the North American Free Trade Agreement (NAFTA) have been initiated. All six cases remain pending. More than two years after entering into force, USMCA’s terms (as opposed to its extension of NAFTA’s terms) have yet to be implicated in a dispute.
On December 17, 2020, ICSID registered the first legacy dispute in Koch Industries v. Canada. The U.S. conglomerate brought a USD $30 million claim over the cancellation of a program designed to reduce carbon emissions. In April 2022, the tribunal invited non-disputing parties to file amicus curiae submissions.
On December 22, 2020, the PCA registered Windstream Energy v. Canada (II), in which the U.S. wind energy developer claims U.S. $333 million over Ontario’s failure to lift the moratorium on its offshore wind project.
First Majestic Silver v. Mexico was registered by ICSID on March 31, 2021. The Canadian mining investor filed a U.S. $500 million claim over retrospective tax liabilities imposed by Mexico.
On May 12, 2021, ICSID registered Finley Resources v. Mexico, in which several U.S. oil and gas investors claimed that Mexico violated provisions of NAFTA and USMCA regarding their investment contracts with national petroleum company Pemex. On January 26, 2022, the tribunal issued a confidential provisional measures decision.
On December 22, 2021, ICSID registered TC Energy & TransCanada v. U.S. (II), in which Canadian investors brought a $15 billion Canadian Dollar claim over the cancellation of the Keystone XL pipeline. On September 21, 2022, the tribunal was constituted.
In September 2022, the U.S. precious metals producer Coeur Mining filed a request for arbitration against Mexico over its refusal to grant VAT refunds on royalty payments.
On July 1, 2022, ICSID’s amended rules came into force. ICSID has described its amended rules as intended to “streamline[]” and “modernize[]” ICSID arbitration, including by increasing “efficien[cy]” and “transparency.” These include several new rules.
Under Rule 14, a party must disclose the “name and address” of any direct or indirect third-party funder from whom the party has received funding to pursue or defend the proceeding through a “donation or grant” or in return for outcome-dependent “remuneration.” If the third-party funder is a “juridical person,” the party must disclose the “names of the persons and entities that own and control” that person. Rule 14 also provides that a tribunal may order disclosure of “further information regarding the funding agreement.”
Rule 58 provides that a tribunal “shall” render the award “no later than” “240 days after the last submission,” although Rule 12 provides that a tribunal shall use “best efforts” to meet the time limits in ICSID’s rules.
Under Rule 62(3), parties are deemed to have consented to the publication of awards and decisions on annulment “if no party objects in writing to such publication within 60 days” after dispatch of the document. Rules 63 and 64 provide that ICSID “shall” publish orders, decisions, and parties’ written submissions, although that rule is subject to Rule 66, which protects various types of confidential information from public disclosure.
Under Rule 75(1), parties may agree to expedited arbitration. Rules 75–86 provide that shorter timelines and page limits apply in expedited arbitration.
The Law Commission has reported on proposed changes to the Arbitration Act 1996. These changes are essentially a “light touch” but propose a statutory duty of disclosure, codifying the law.
In NDK Ltd v HUO Holding Ltd the court found that claims between shareholders under a company’s articles “related to” or were “in connection with” matters in a shareholders’ agreement that mandated arbitration.
In Gol Linhas Aereas S.A v Matlin Patterson, the Privy Council ruled that the standard of due process to resist enforcement under the New York Convention is not dictated by local standards, but is a general standard “capable of application to any international arbitration” and comprising “the basic minimum requirements that would generally . . . be regarded by the international legal order as essential to a fair hearing.”
In Ducat Maritime v Lavender Shipmanagement, the court set aside part of an award on the grounds that an “obvious accounting mistake” by an arbitrator had breached the duty of fairness. The decision is seen as blurring the focus of the serious irregularity provision, where the relevant inquiry is whether there has been a failure of due process, not whether the tribunal has reached the correct answer.
In a landmark judgment on investor-state arbitration, the Irish Supreme Court held in Costello v. Government of Ireland that an arbitration tribunal system to be established under the EU-Canadian Comprehensive Economic Trade Agreement (CETA) would infringe the principle of judicial sovereignty under the Irish Constitution.
In particular, CETA establishes an arbitral tribunal that would handle investor-state disputes and make monetary awards against the Irish State. The Supreme Court found that this would contravene Irish constitutional law because Irish courts would not have the power to refuse enforcement of awards made by the tribunal.
But the Supreme Court noted that if the Irish legislature passed certain amendments to Ireland’s Arbitration Act 2010 then CETA could be ratified. Indeed, one of the judgments suggests specific amendments which would expressly allow the Irish High Court to refuse enforcement of a CETA tribunal award on specific grounds, namely if the award materially compromised the constitutional identity of the State, or it materially compromised the State’s obligation to give effect to EU law.
In the landmark Belokon decision, the Cour de cassation upheld the Paris Court of Appeal’s annulment of an arbitral award due to corruption allegations regarding the underlying agreement. The decision confirmed French courts’ move towards a “maximalist” standard of review of awards’ conformity with international public policy, namely in assessing corruption allegations “in law and in fact” without engaging in a review on the merits.
In Sorelec, which also dealt with corruption allegations, the Supreme Court similarly concluded that there was no limitation on reviewing courts’ “power to investigate in law and in fact all the elements concerning the relevant ground for review.”
On October 12, 2022, Spain announced its intention to withdraw from the Energy Charter Treaty (ECT). The decision will take effect one year after Spain’s withdrawal notice, but the ECT will continue to apply for another twenty years to investments made before the effective date. As such, investors who make their investments before the effective date may still initiate proceedings under the ECT.
Following the landmark Achmea decision by the Court of Justice of the European Union (CJEU) on March 6, 2018, on April 28, 2022, the Kammergericht Berlin (Berlin Higher Regional Court) ruled that the admissibility of the arbitral proceedings was subject to neither national courts’ nor the CJEU’s supervisory authority because the arbitration was administered by ICSID. The Berlin Court thus rejected Germany’s request to declare that respondents’ claim against Germany under Article 26 of the ECT was inadmissible as one concerning an intra-EU dispute. The decision has been appealed to the German Federal Court of Justice; a decision is expected in 2023.
The Bundesverfassungsgericht (German Federal Constitutional Court) found that the mandatory arbitration clause of the Court of Arbitration for Sport (CAS) violated an athlete’s constitutional right of access to justice under the Grundgesetz (German Federal Constitution).
The Swiss Arbitration Centre has issued “Supplemental Swiss Rules for Corporate Law Disputes” (the Supplemental Swiss Rules) which will enter into force on January 1, 2023.
The Supplemental Swiss Rules were drafted in parallel to a new Article 697n of the Swiss Code of Obligations, which will enter into force the same day. The new Article 697n expressly allows Swiss companies to include arbitration clauses for corporate law disputes in their articles of association. Arbitrations based on such statutory arbitration clauses are domestic arbitrations as a matter of law and governed by Part 3 of the Swiss Civil Procedure Code. Companies may, however, regulate the specifics of the arbitration proceedings, including by reference to institutional arbitration rules.
The Supplemental Swiss Rules are designed to account for the specific characteristics of corporate law disputes. Specifically, they (1) implement the statutory requirement that “persons who may be directly affected by the legal effects of the arbitral award” are notified timely about the commencement and termination of the arbitration and are given an adequate opportunity to participate in the proceedings; (2) adapt the rules on interim and emergency relief under the Swiss Rules; and (3) provide a Model Arbitration Clause which companies may incorporate into their articles of association.
Uraltransmash and its broad interpretation of Articles 248.1 and 248.2 of the Code of Arbitrazh Procedure (CAP) continues to have ramifications for Russian court practice. Courts have reviewed both foreign arbitral and court decisions as the relevant CAP provisions do not differentiate between the two.
Courts mostly followed the reasoning in Uraltransmash. In Sovfrakht, the court prohibited an English company from continuing an English court proceeding against a Russian sanctioned entity and awarded compensation in the amount of the English claim. In Dell, the court opined, albeit in dicta, that the imposition of sanctions was sufficient per se for Russian courts to assume jurisdiction over the otherwise foreign arbitration. In Siemens, the court prohibited Siemens from pursuing arbitration before the Vienna International Arbitral Centre (VIAC) in favor of Russian courts.
However, in somewhat of an outlier decision, in Rizzani, the court held that the barriers to access to justice that a Russian sanctioned party would encounter in a foreign state were only a rebuttable presumption (overturned in the event).
As regards non-sanctioned Russian entities, in Cabinplant, Credit Suisse, and Mastercard, the courts rejected attempts to invoke paragraph 4 of Article 248.1. For example, in Cabinplant, the court dismissed a Russian state-owned company’s claim on the partiality of arbitrators due to Sweden, an “unfriendly” country, being the arbitration seat.
Despite the war, the International Commercial Arbitration Court (ICAC) at the Ukrainian Chamber of Commerce and Industry (UCCI) in Kyiv only suspended the administration and consideration of commercial disputes from February to March 2022 before resuming operations. On July 1, 2022, amendments to the ICAC Rules were adopted to ensure the effective administration of cases during the martial law period by increasing the use of electronic communications.
Investment arbitrations against Ukraine have been suspended to enable the Ministry of Justice to focus on lawfare against Russia (e.g., European Court of Human Rights claims, creation of the international claims commission following the adoption of the U.N. General Assembly Resolution dated November 14, 2022, on reparations to Ukraine).
Russia failed to set aside the jurisdictional awards in the Aeroport Belbek, Everest Estate and Privatbank cases, which may serve as guidance for potential claimants who lost their investments in territories annexed by Russia in 2022.
Facing threats of investment disputes because of its freezes and seizures of Russian energy infrastructure assets, Ukraine invoked the denial of benefits provision under the ECT to refuse protection to Russian-owned investments.
The Supreme Court of Ukraine unified court practice to ensure the prompt and effective recognition and enforcement of ICSID awards.
In March 2022, the High Court of Australia granted special leave to appeal a decision of the Full Federal Court enforcing an award against Spain under the ICSID Convention. This appeal continues a line of decisions considering the doctrine of sovereign immunity in the enforcement of ICSID awards in Australia and is one of the few arbitration decisions to reach Australia’s highest court.
In 2021, the Full Court held that there was a distinction between “recognition” and “enforcement” proceedings, ultimately ordering that the award be enforced. Notably, the Full Court did not address the primary judge’s finding that Spain had submitted to the jurisdiction of the Federal Court, waiving its right to sovereign immunity by virtue of the ICSID Convention. Spain has raised this issue for consideration by the High Court.
The appeal was heard in November 2022 and irrespective of the outcome, the decision will provide clarity around the role of sovereign immunity in enforcing arbitral awards in Australia.
The Legislative Council of Japan’s Ministry of Justice has largely completed its amendments to Japan’s Arbitration Law of 2003. The amendments, which focus on interim measures, are expected to pass into law in 2023 and aim to bring the Arbitration Law in line with the 2006 amendments to the UNCITRAL Model Law. Other amendments include giving courts discretion to waive the requirement for Japanese translations of all or some evidence in arbitration-related proceedings and extending the jurisdictions of the Tokyo and Osaka District Courts to hear cases relating to arbitration.
China has expanded entry permits for overseas arbitration institutions to establish offices and operations in China. Some large cities such as Beijing, Shanghai, and Chongqing have issued guidance on the conditions and procedures for the establishment of these offices. Beijing will allow overseas arbitration institutions to establish offices in the China (Beijing) Pilot Free Trade Zone upon registration with the Beijing Judicial Bureau and will allow parties to select foreign arbitration institutions for arbitration agreements involving foreign matters.
Effective January 1, 2022, China cancelled the requirement that the Supreme People’s Court (SPC) review all non-enforcements or revocations of arbitral awards rendered by Chinese arbitration institutions where the parties are domiciled in different provinces. Now, for cases not involving foreign (including Hong Kong, Macau, or Taiwan) matters, only non-enforcement or revocation of an arbitral award rendered by a Chinese arbitration institution “on the grounds of violation of public interests” shall be reviewed by the SPC.
The United Nations Convention on Contracts for the International Sale of Goods came into force in Hong Kong on December 1, 2022, making Hong Kong a more competitive international commercial dispute settlement center. Further, Hong Kong issued the Arbitration and Legal Practitioners Legislation (Outcome Related Fee Structures for Arbitration) (Amendment) Bill 2022 in March, which is expected to save parties significantly on arbitration costs and encourage arbitration in Hong Kong.
Singapore continues to liberalize the funding of dispute resolution as laws permitting conditional fee agreements came into effect on May 4, 2022.
In one of several important decisions in 2022 regarding arbitration, on October 7, 2022, the Singapore High Court held that an emergency interim award issued by an emergency arbitrator in Pennsylvania was enforceable as a binding foreign award under the International Arbitration Act.
The newest version of the Singapore International Commercial Court procedural rules went into effect on April 1, 2022.
Cambodia’s National Commercial Arbitration Centre administered its first emergency arbitration in 2022.
The Philippines Securities and Exchange Commission issued guidelines on September 18, 2022 for the arbitration of commercial disputes governed by arbitral clauses within incorporation documents.
On March 21, 2022, the Dubai International Arbitration Centre (DIAC) launched the DIAC Arbitration Rules 2022. The purpose of the new rules is to increase the efficiency and transparency of arbitration proceedings, including by making electronic communications the default between the parties, the tribunal, and DIAC. Other procedural changes in the 2022 Rules include the introduction of expedited proceedings and provisions for the joinder of additional parties and consolidation of claims.
On September 23, 2022, the International Council of Arbitration for Sport adopted the Arbitration Rules for the 2022 FIFA World Cup Qatar Final Round. These provide that certain disputes shall be resolved through arbitration where they arise “during – and in connection with – the final round of the 2022 FIFA World Cup Qatar” held between November 20 and December 18, 2022.
On May 10, 2022, the Nigerian Senate passed the Arbitration and Mediation Bill 2022. The bill repeals the Arbitration and Conciliation Act 1988 and introduces new provisions, including for the creation of an appellate level arbitral process and terms regarding consolidation and joinder, third-party funding, emergency arbitrators, and the recognition and enforcement of interim measures.
In the Tee Que case, the International Arbitration Act No. 15 of 2017 was interpreted by the South African courts for the first time. The Court upheld the relevant arbitration agreements and ordered a stay of local proceedings pending referral of the dispute to arbitration.
The General Arbitral Tribunal of the Buenos Aires Stock Exchange, one of the country’s leading institutions, migrated all operations to an online platform. The decision was implemented on May 16, 2022, and encompasses both new and ongoing proceedings, with only a few exceptions.
A trend toward fixing clear limits on the role of national courts in arbitration also continues. Following last year’s Supreme Court decision regarding this approach in the recognition and enforcement of arbitral awards, on March 9, 2022, the Commercial Court of Appeals, Chamber B, reinforced that national courts are limited to analyzing the annulment grounds listed in the procedural code. The court dealt specifically with procedural flaws in the arbitral proceeding, noting that due process requires that parties receive equal treatment, namely equal opportunities to present their arguments, support them with evidence, and counter their opponent’s procedural actions.
The Chamber of Commerce and Services of Uruguay, which hosts the country’s main arbitral center, introduced a new set of rules applicable to arbitrations filed after January 1, 2022. The new rules bring the institution in line with the standard practices of international arbitral institutions, including with respect to submissions, technology, joinder of additional parties, and consolidation of proceedings.
The Paraguayan Arbitration and Mediation Center continued its modernization. On August 1, 2022, the institution issued Announcement No. 29 (Circular 29/2022) amending its Rules for Arbitrators and establishing a mechanism for arbitrator selection.
Further, the Civil and Commercial Court of Appeal, Fifth Chamber, affirmed the importance of national courts avoiding undue intervention in arbitral proceedings, highlighting the leading role of arbitrators as directors of the dispute resolution process.
In June 2022, the Superior Court of Justice (SCJ) ruled on two cases regarding jurisdictional conflicts.
The first concerned conflicting decisions from an arbitral tribunal and an employment court where both claimed jurisdiction over a dispute between an insurance company and a former franchisee. The SCJ held, contrary to the principle of kompetenz-kompetenz, that the employment court should first determine whether the franchisee was an “employee.” If it was not, the arbitral tribunal could assume jurisdiction. The decision remains subject to appeal.
In the second case, the SCJ ruled on a jurisdictional conflict between two arbitral tribunals. One arbitration had been initiated by minority shareholders and the second by the company. Both arbitrations involved damages claims against the majority shareholders of the listed company allegedly caused by (admitted) illegal conduct. The SCJ held that the tribunal overseeing the arbitration initiated by the company should determine the claims pertaining to the liability of the company’s officers, directors and controlling shareholders, and thus that any arbitrations initiated by the minority shareholders should be dismissed. The SCJ further held that derivative lawsuits against the controlling shareholders, brought under Brazil’s Corporations Act, first require inaction by the company—with which the right of action ultimately resides.
The President of the Court of Appeals of Santiago deployed his powers of arbitration assistance and supervision in two instances in 2022. In one case, the President of the Court denied a request to invalidate the appointment of an arbitrator, stating that the applicable arbitration rules provided for adequate mechanisms to guarantee the independence and impartiality of the tribunal and that the decisions of the appointing authority are final.
In another case, the President of the Court held that the arbitral tribunal did not have jurisdiction over a dispute because the defendant was not a party to the arbitration agreement.
Venezuela faced several enforcement orders in 2022. In August, a U.S. court ordered Venezuela to pay USD $8.5 billion, enforcing a 2019 award in favor of ConocoPhillips. In June, the Paris Court of Appeal upheld a USD $1.2 billion award in favor of Rusoro.
Venezuela also saw the resolution of several disputes. An ICSID tribunal ordered Venezuela to pay USD $1.6 billion to Agroinsumos Ibero-Americanos for expropriation. Another tribunal dismissed outright a dual national’s treaty claim.
Peru saw positive results in several arbitrations in 2022. Petroperu reportedly won an ICC arbitration against Grupo Cobra, with the tribunal ordering Grupo Cobra to finalize the Talabra refinery project and splitting arbitration costs. Another tribunal dismissed on jurisdictional grounds claims for USD $96 million relating to Peru’s alleged violation of the Peru-U.S. Trade Promotion Agreement. In June, the Autopista del Norte v. Peru tribunal awarded a fraction of the damages sought. An ICC tribunal, however, ordered Peru’s Pronatel to pay USD $177 million to Quanta Services over a telecom networks project.
Marcus Quintanilla of MSQ Global Dispute Resolution and Carla Gharibian of Jones Day are the co-editors of this article. The following firms contributed to this article: Arzinger Law Firm: Timur Bondaryev and Volodymyr Nakonechnyi (Ukraine); Borden Ladner Gervais LLP: Robert J.C. Deane and Les Honywill (Canada); Cleary Gottlieb Steen & Hamilton LLP: Jeffrey A. Rosenthal, Katie L. Gonzalez, and Katerina Wright (United States); DLA Piper: Caoimhe Clarkin, Marcus Walsh, Bella Chan, and Maximilian Mitscherlich (Ireland); Dewey Pegno & Kramarsky LLP: Keara A. Bergin and Christopher P. DeNicola (ICSID); Fox Williams LLP: Peter Ashford (England); Jones Day: Amélie-Lou Blouin (France, Middle East, Africa), Antonio Canales (Spain), James A. Egerton-Vernon (Brazil), Mercedes Fernández (Spain), Gustavo A. Galindo (Mexico), Melissa Stear Gorsline (NAFTA/USMCA), Benjamin Holloway (Australia), Haifeng Huang (China/Hong Kong), Elie Kleiman (France, Middle East, Africa), Viktoriia Korynevych (NAFTA/USMCA), Annie Leeks (Australia), Anatoly Matveev (Russia), Reece McMahon (Australia), Fernando F. Pastore (Brazil), Maria I. Pradilla Picas (Peru, Venezuela), Claire Pauly (France, Middle East, Africa), Adam Rompotis (Australia), Jiahui Sheng (China/Hong Kong), José Antonio Vázquez Cobo (Mexico), Jessica Zhang (China/Hong Kong); Mattos Filho: Arthur Parente (Brazil); Nishimura & Asahi: Lars Markert (Japan); Peters, Schönberger & Partner: Christina Nitsche (Germany); Porzio Ríos García: Anthony Lynch (Chile); Rosa/Scaianschi Consultores: Héctor Scaianschi Márquez (Argentina, Uruguay, Paraguay); Schellenberg Wittmer Ltd: Elliott Geisinger and Benjamin Gottlieb (Switzerland); White & Case LLP: Preeti Bhagnani and Eric Lenier Ives (United States). Tom Pearson (Singapore, ASEAN), Visiting Research Fellow, Future Forum (Cambodia), also contributed to this piece.
